Opinion: Brand building took a backseat during the pandemic - it's time to rebalance
Brand building and advertising have faced some turbulence during the pandemic, but certain marketing strategies can be adopted if brands want to get back on track
May 02, 2022 04:22:00 AM | Article | Imran Hirani
India’s marketing landscape has seen a tumultuous change in the past 2 years with digitalisation getting deeply embedded in every marketer’s strategy, an upsurge of D2C (direct to consumer) brands and a growing number of startups.
Awareness efforts, in particular, quickly took a back seat as even large multinationals have slammed the brakes on their brand building. Conversion-oriented marketing has been the marketing industry darling for some time. It’s attractive because it drives sales in this quarter, not the next—and immediate gratification carries weight.
Shortening CMO tenures and reporting cycles amplify this trend, as a focus on near-term sales—and the ability to measure the impact of conversion marketing—drove the shift to conversion-oriented marketing.
Budget and impact conversations are increasingly becoming critical, while performance marketers showcase their ability to drive conversions, brand builders with their struggle to demonstrate the near-term value, contend for longer-term investments. This dilemma is growing for the organisations by the day!
Brand building and conversion marketing have different attributes
The unsung importance of awareness and consideration
Marketers have always been pressured to deliver measurable ROI for their efforts, but the demand for growth has sharpened as the world looks toward a post-pandemic future. As the public (and private) learnings of other brands suggest, that growth must be addressed with balanced marketing strategies that re-elevate upper-funnel, brand building efforts to work in tandem with the mid- and lower-funnel efforts. Importantly, brand-building efforts are a lever to drive sales.
Traditional sources of brand equity are eroding
We know that there’s never a good time to stop advertising, but the need to drive awareness has never been more important for brands. Given the prevalence of choice and access, staying top-of-mind with consumers could be the difference maker when a sale is at stake. Nielsen data shows that marketing accounts for 10%-35% of a brand’s equity. Equity also comes from visibility, such as seeing a product on the shelf or signage on a storefront, as well as regular product usage, such as the subtle reminder about an auto brand every time you drive your car.
These traditional sources of equity (e.g. seeing product on shelf, signage and brand usage) are eroding because a) people were often locked down and not going out to see signage or see the products on shelf and b) supply chain disruptions caused many people to have to try an alternate brand, different from the one they used most often in the past. In addition the online “shelf” is infinite which makes it increasingly difficult for single brands to stand out.
Marketers, it’s time to rebalance
The rebalancing of marketing strategies before the pandemic by some brands speaks to an important recognition: Building and maintaining a brand takes more than simply maintaining sales. With that insight, brands need to understand that the channels that are great for driving sales may not be ideal for driving awareness. While there is a modest correlation between a channel’s effectiveness for upper-funnel efforts and its effectiveness for lower-funnel efforts, we believe that isn’t particularly helpful when it comes to making investment choices.
Brand building and advertising have faced some turbulence during the pandemic, but certain marketing strategies can be adopted if brands want to get back on track.
Studying channel effectiveness in driving long-term sales helps marketers understand how strong a particular channel is at driving awareness and other upper-funnel metrics that have latent sales effects. Consumers, for example, believe television is among the best channels for becoming aware of a brand. Yes, TV is, on average, one of the most effective channels for driving long-term sales lift, but every campaign is different—and so is the effectiveness of TV across them. We found that in 25% of Nielsen marketing mix studies, TV was in the lowest quintile of all channels in producing long-term effects. In a separate 25%, it was the very best.
The right message + channel mix is critical for growth
Caring for upper-funnel metrics requires a keen alignment between messaging and channel, and this is particularly true with brand-building efforts. To illustrate, let’s look at the impact of marketing by message strategy for two very different brands: an electronics brand and an auto brand.
When we measured the impact in both the short and long term, we found:
- Lower-funnel messaging has a higher short-term impact than upper-funnel messaging, but it doesn’t deliver much additional value in the long term.
- Upper-funnel messaging delivers slightly lower short-term results, but it delivers meaningful additional value in the long term.
When we look at these two cases through the lens of specific channels, the results are even more illuminating. With upper-funnel messaging, video and offline media are very efficient in driving short- and long-term sales. With lower-funnel messaging, non-video and online media are more efficient in driving short-term sales than they are in driving long-term sales.
While it can be challenging to know how much a brand should lean on short- and long-term objectives, marketers should consider a few key questions when making their marketing decisions:
- What are the minimum business requirements in the short term?
- Does the business have the flexibility to wait for longer-term outcomes?
- How is the rest of the category moving with respect to the balance of upper- and lower funnel messaging?
Key takeaways for marketers
- Make upper-funnel marketing a meaningful part of your investment
- Your brand equity might already be deteriorating because non-marketing sources of equity are dissipating—brand building can help offset these losses
- Building your brand drives direct sales impact and improves the efficacy of your activation efforts. Cultivate understanding and support in your company for upperfunnel efforts
- Measure the long-term sales and/or brand equity effects of upper-funnel marketing to build evidence of their impact and to instill the need to be patient for the eventual sales results
- Measure the impact of lower- and upper-funnel messages separately to demonstrate more visible lifts in the intended outcomes (i.e., upper-funnel messages will likely boost brand metrics, while lower-funnel messages will likely boost sales; if you mix the two together and measure as one, it may depress the aggregate lift)
Embrace duality of objectives and the potential for conflict between the two
Marketers have to meet near-term sales targets and position a brand for future success. These can seem at odds with each other for two reasons: budgets are limited and doing more of one may mean doing less of the other; and the optimal mix of media channels and message strategies will likely vary when optimising for only the short- or long-term objective.
To optimise for both objectives simultaneously: -
- Consider optimising your marketing mix for total sales (not just for short- or long-term goals). Total sales can be a useful target if you’ve already measured both short- and long-term ROI. Alternatively, short- and long-term ROI could be weighted based on company priorities before combining them for use in optimisations.
- Standard industry solutions don’t typically account for both upper- and lower-funnel marketing efforts in the same solution. To address the need for short-term sales and to seed long-term growth, marketers should run effectiveness studies for both short- and long-term ROI. One way to do this is to run marketing mix models (MMMs) to optimize channel mix for short term-sales, and then use a second analysis to optimize channel mix for awareness or other upper-funnel metrics. Finally, brands should look at both plans and weight them together based on organizational goals. This should help brands create a more balanced plan that supports both their short-term needs and their long-term ambitions.
- Develop a plan to stay on course. Once you set a balanced plan, you may encounter challenges to it, particularly if short-term expectations are increased or sales fall short of expectations. Consider using frequent short-term measurements and optimisations to both prove out that the balanced plan is working and to ensure that any changes required are minor and not reversions to unbalanced approaches.
The author is vice president, strategic insights, Nielsen